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TMI Blog1990 (7) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1979-80 for which the accounting period ended on March 31, 1979. The assessee was claiming deduction on account of his liability towards payment of purchase tax under the Kerala General Sales Tax Act every year. Such deductions were allowed for the assessment years 1977-78 and 1978-79 (years ending March 31, 1977, and March 31, 1978). The Government of Kerala, by a notification dated March 29, 1979, granted exemption in respect of the tax payable on purchase of marine products during the period April 1, 1977, to March 31, 1979. This will cover the assessment years 1978-79 and 1979-80. The notification was the one passed under section 10 of the Kerala General Sales Tax Act. The total liability claimed by the assessee and allowed as deduction as purchase tax, for the assessment year 1978-79, amounted to Rs. 3,53,398. The Income-tax Officer did not consider the applicability of section 41(1) of the Incometax Act in respect of the remission of this liability. So, the Commissioner of Income-tax took the view that the assessment order dated September 7, 1982, passed by the Income-tax Officer for the assessment year 1979-80, was erroneous and prejudicial to the interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute and the case law, by order dated December 4, 1986, held in favour of the assessee on both counts. It is thereafter at the instance of the Revenue that the two questions of law formulated hereinabove have been referred for the decision of this court. We heard counsel for the Revenue, Mr. P. K. R. Menon, as also counsel for the respondent/assessee, Mr. Roy Chacko. Counsel for the Revenue stressed on two aspects : (i) The notification granting exemption of purchase tax for the period April 1, 1977, to March 31, 1979, is dated March 29, 1979. What is relevant is the date of the notification and not when the notification was made available to the public or when the assessee came to know of it. Counsel for the Revenue submitted that the notification dated March 29, 1979, should have been held to be published on the same day when it was published in Gazette Extraordinary and it took effect instantaneously. The benefit accrued to the assessee as soon as the Government passed the notification and so the amount was rightly includible by invoking section 41(1) of the Act for the assessment year 1979-80 for which the accounting period ended on March 31, 1979. In stressing the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation. It will take effect only if it is published or made known to the public. To substantiate the above proposition, counsel placed reliance on the Full Bench decision of this court in R. K. V. Motors and Timbers (P) Ltd. v. Regional Transport Officer [1982] KLT 166 ; AIR 1982 Ker 156 [FB], the decision of the Madras High Court in Asia Tobacco Co. Ltd. v. Union of India [1985] 155 ITR 568 and the decision of the Supreme Court in holding that Srinivasan V. State of Karnataka, AIR 1987 SC 1059, 1067. So, it was argued that the Commissioner of Income-tax was in error in holding that the benefit accrued to the assessee as per the notification during the assessment year 1979-80. On the second point regarding merger, the assessee's counsel submitted that the entire assessment order passed by the Income-tax Officer dated September 7, 1982, for the assessment year 1979-80, merged in the order passed by the Commissioner of Income-tax (Appeals) dated October 20, 1983, and no part of the assessment order can be subjected to an order in revision under section 263 of the Act irrespective of the points or questions appealed against by the party or considered or decided by the appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the law itself. The State has an obligation to speak or to make known a rule, so that it could answer the description of law. The idea that a person may be governed by a law that cannot be known by him because it is not published or promulgated is revolting to judicial conscience and civilised thought. It has with it a strong odour of totalitarianism and of the Gestapo. It is repugnant to the principles of justice, freedom, equality and fraternity, cherished by all lovers of democracy and enshrined in our Constitution". It follows that mere making of a subordinate legislation is not sufficient to give validity to it : publication is necessary for bringing it into force or giving validity to it. The Full Bench has adverted to innumerable decisions on the subject, and, in particular, to the decision in Johnson v. Sargant and Sons [1918] 1 KB 101 ; Harla v. State of Rajasthan AIR 1951 SC 467 and the decision of the Andhra Pradesh High Court in R. Narayana Reddy v. State of A. P. [1969] 1 An W. R. 77. In Harla's case, AIR 1951 SC 467, the Supreme Court has held that before a law can become operative, it must be promulgated or published. It must be broadcast in some recognisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than, AIR 1951 SC 467, and the view expressed by many academicians and has finally wound up the discussion by stating as follows: "A complex modern State like ours requires extensive legislation. That Parliament has to delegate many powers to subordinate legislators is now universally acknowledged. Part of the price the citizen has to pay for living in our society is the obligation to make himself acquainted with the mass of delegated legislation which applies to him. Part of the price the delegated legislator must pay for the privilege of making those laws is to make them available to the citizen. The common law, by requiring those laws to be published before they become effective, Woes much to exact that price." (Emphasis supplied). In this context, it is interesting to advert to the decision of the Judicial Committee of the Privy Council in Lim Chin Aik v. Regina [1963] 1 All ER 223, where it was held that the principle that ignorance of law is no excuse is inapplicable where there is no legislative provision for the publication of the order or designed to enable the man concerned to find out by appropriate inquiry what the law affecting him in this respect is. In the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer is taken in appeal, the initial order merges in the first appellate order and no part of it can be subjected to revision under section 263 of the Act irrespective of the points urged by the party or considered or decided by the first appellate authority. The conflicting views have been dealt with in Chaturvedi and Pithisaria's Income-tax Law, Third Edition (Vol. 5), page 4594. Conflicting judicial opinion has been exhaustively dealt with therein. See also Chaturvedi and Pithisaria's Income-tax Law, Third Edition (Vol. 7) (Supplement), pages 6677 and 6678. A Bench of this court in CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733, after an exhaustive reference to the relevant case law, has stated the law thus (headnote) : "The doctrine of merger, whatever be its scope in general law, when considered in the context of the provisions of a taxing statute can have application only in respect of matters considered and decided by the appellate authority, and not matters falling outside his decision. A narrow construction of the provisions of section 263 of the Income-tax Act, 1961, limiting or diluting its scope would be a serious inroad into the object of the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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